Supply Chain Index Webinar May 19, 2014
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Transcript of Supply Chain Index Webinar May 19, 2014
The Supply Chain Index
WebinarMay 19, 2014
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Supply Chain Insights LLC Copyright © 2013, p. 2
Supply Chain Insights is focused on delivering independent, actionable and objective
advice for supply chain leaders.
A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know
and metrics that matter.
About Us
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Supply Chain Insights LLC Copyright © 2013, p. 3
Presenters
Abby MayerResearch Associate
Lora CecereFounder and CEO
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Dr. George RungerProfessor, CIDSE, ASU
Supply Chain Insights LLC Copyright © 2013, p. 4
Agenda
Supply Chain Index Vision
History of Our Work
Strength, Balance and Resiliency
Why It Matters To You
What's Next?
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Supply Chain Insights LLC Copyright © 2013, p. 5
A Supply Chain is a Complex System
with Complex Processes
with Increasing Complexity
Our Belief
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Supply Chain Insights LLC Copyright © 2013, p. 6
Perform better than peer group
Improve year-over-year results
Align internally on metrics
Deliver against the business strategy
Demonstrate consistency in results
Use innovation in supply chain processes
Balance. Be leaders in managing trade-offs
Our Point of View: Definition of Supply Chain Excellence
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Supply Chain Insights LLC Copyright © 2013, p. 7
Resilient and predictable
Balanced across the set of metrics to maximize value
Showing year-over-year strength against peer group
Desired Corporate Performance
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Supply Chain Insights LLC Copyright © 2013, p. 8
The Supply Chain Effective Frontier:First Representation
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Supply Chain Insights LLC Copyright © 2013, p. 9
The Supply Chain Effective Frontier: Second Representation
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In most supply chains, complexity has risen throwing the supply chain out of balance. We find that nine out of ten companies are stuck at the intersection of inventory turns and operating margin.
Supply Chain Insights LLC Copyright © 2013, p. 10
Supply Chain FinanceIs a Barrier for Most
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Supply Chain Insights LLC Copyright © 2013, p. 11
Today’s Supply Chain
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Supply Chain Insights LLC Copyright © 2013, p. 12
A Business Continuity Risk
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Supply Chain Insights LLC Copyright © 2013, p. 13
Overall Ranking per Company• Strength: Inventory Turns & Operating Margin Vector Trajectory (30%)• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%)• Resiliency: Inventory Turns & Operating Margin Mean Distance (30%)• Peer: Peer Rankings by Industry (10%)
The Supply Chain IndexA new way to measure relative supply chain performance by industry, based on 4 components: strength, balance, resiliency and peer rankings.
Supply Chain Index
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Supply Chain Insights LLC Copyright © 2013, p. 14
Supply Chain Index Calculation
For the period of 2006-2012
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Supply Chain Insights LLC Copyright © 2013, p. 15
Agenda
Supply Chain Index Vision
History of Our Work
Strength, Balance and Resiliency
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 16
Mining 20 Years of Financial Data
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Supply Chain Insights LLC Copyright © 2013, p. 17
How to Read an Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 18
Available at www.supplychaininsights.com/report-archives
Supply Chain Metrics That Matter Reports
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* Reports look at industry performance of a small peer group on growth, profitability, cycle and complexity metrics
* Includes cross industry analysis of cash-to-cash cycle, operating margin and resiliency
*19 reports to date
Supply Chain Insights LLC Copyright © 2013, p. 19
Supply Chain Metrics That Matter Reports
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Supply Chain Insights LLC Copyright © 2013, p. 20
Agenda
Supply Chain Index Vision
History of Our Work
Strength, Balance and Resiliency
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 21
Strength, Balance and Resiliency
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30%Inventory Turns & Operating Margin
Trajectory
30%Return on Invested Capital & Revenue Growth Trajectory
30%Inventory Turns & Operating Margin Mean Distance
Strength Balance Resiliency
Supply Chain Insights LLC Copyright © 2013, p. 22
Resiliency by Industry
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Supply Chain Insights LLC Copyright © 2013, p. 23
Results for Chemical Industry
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Supply Chain Insights LLC Copyright © 2013, p. 24
Chemical Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 25
Chemical Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 26
Results for Consumer Packaged Goods Industry
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Supply Chain Insights LLC Copyright © 2013, p. 27
Consumer Packaged Goods Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 28
Consumer Packaged Goods Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 29
Results for Pharmaceutical Industry
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Supply Chain Insights LLC Copyright © 2013, p. 30
Pharmaceutical Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 31
Pharmaceutical Industry Orbit Chart
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Supply Chain Insights LLC Copyright © 2013, p. 32
Agenda
Supply Chain Index Vision
History of Our Work
Strength, Balance and Resiliency
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 33
Why It Matters
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
BASF SE 0.10 5.3 39 .0.55
E. I. du Pont de Nemours and Co.
0.10 4.0 56 .0.67
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
Samsung Electronics Co., Ltd.
0.11 8.3 35 0.59
LG Electronics Inc. 0.04 6.7 49 1.13
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
Procter & Gamble Co. 0.18 5.6 55 0.52
Unilever N.V. 0.13 5.3 93 0.74
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Supply Chain Insights LLC Copyright © 2013, p. 34
• Supply Chain Index:
Improving Strength,
Balance and Resiliency
• Our May 2014 research report examines the three industries and the methodology in great detail.
• Find it here: www.supplychaininsights.com/the-supply-chain-index
Index Research Report
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Supply Chain Insights LLC Copyright © 2013, p. 35
• Read the report• Benchmark against peers.• Improve reliability of inventory turns & operating
margin performance.• Understand that industries with high variability
pose risk to your supply chain.• Measure progress in centimeters, not kilometers.
What Can You Do?
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Supply Chain Insights LLC Copyright © 2013, p. 36
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
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Supply Chain Insights LLC Copyright © 2013, p. 37
1. Consumer, Healthcare and Industrial Value Network reports through the summer
2. Final analysis of companies to be revealed at the 2014 Supply Chain Insights Global Summit
Next Steps
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Supply Chain Insights LLC Copyright © 2013, p. 38
Metrics That Matter
• Lora Cecere’s 2nd book: Metrics That Matter
• To publish in Fall 2014
http://tinyurl.com/metricsthatmatter
Pre-orders available on Amazon:
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Supply Chain Insights LLC Copyright © 2013, p. 39
What’s Happening at Supply Chain Insights?
www.supplychaininsights.com
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Supply Chain Insights LLC Copyright © 2013, p. 40
About Lora Cecere
• Founder of Supply Chain Insights
• Invited to be a “LinkedIn Influencer”
• Invited to write a guest blog for Forbes
• Author of 2 books: Bricks Matter (2012) and Metrics That Matter (to publish Fall of 2014)
• Partner at Altimeter Group (leader in open research)
• 7 years of Management Experience leading Analyst Teams at Gartner and AMR Research
• 8 years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA)
• 15 Years Leading teams in Manufacturing and Distribution operations for Clorox, Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter & Gamble.
Contact Information: • Email: [email protected]• Blog: www.supplychainshaman.com (6000 pageviews/month)• Forbes: http://www.forbes.com/search/?q=lora+cecere• Twitter: lcecere (4800 followers)• LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (7000 in the network)
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Questions?
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